Price affects perception
Did you know that since price positively influences our perceptions of quality, and inversely influences perceptions of value, sellers of mundane products use history, story, exclusivity and implied scarcity to change our appetites? This explains why lobster went from prison food (at one time fetching $ 0.11/lb) to a favourite in fine dining restaurants and why we tend to experience more pleasure from a wine we’re told costs more.
Although a high price may influence a customer’s perception of value in a positive way it is important to keep in mind that it must fall within a window of expectation: if the price is too high, we tend to think that the product is a rip-off.
This is not the only aspect to consider when deciding a price on a product: it can also help to learn the principles behind ‘Charm Prices’ and why most prices end with the number 9. Indeed, products that includes the number 9 increase sales by 24% compared to nearby, rounded price points.
How healthy got pricey
You may have noticed that healthy foods have got pricier over time however, the perception of the value of the food we consume is not necessarily decided by how good it us for us. Instead, it is decided by how we feel towards it. Let’s use ancient grains as an example to demonstrate this: the word ‘ancient’s is associated with “simplicity” and “health”, and by mentioning “ancient grains” on a label, you could increase the price by 50-300%.
Understanding the principles can be hugely useful when implementing business strategies as it can help to boost a company’s profits. So take a look at the infographic below and learn how the power of perception can benefit you.
This infographic by Vouchercloud demonstrates that value is in the eye of the beholder by exploring the psychology behind our perceptions of a certain product. It explores how trends, generational attitudes as well as marketing strategies play an important role in how customer’s believe a product will satisfy their needs.
Digital & Social Articles on Business 2 Community